Transforming Service in the Age of the Customer

There has been a lot of buzz in the marketplace that 2014 is the “Age of the Customer.” And with manufacturers increasing innovation and focus on the Internet of Things and smart connected products, the ability to enhance your customer’s experience through connected devices and service will grow exponentially in the next five years.

As service leaders continue to transform service to capitalize on the benefits of Servitization and smart connected products, it should be no surprise that the voice of the customer is critical to success.

Across industries, capturing the customer’s voice to enhance the customer experience is a top priority and companies are investing more money and resources into improving the entire customer lifecycle.

Recently I attended the Warranty Chain Management Conference (WCM) where the emphasis on the customer was evident. Among the service leaders in attendance it was clear both the customer and the warranty lifecycle had become critical components of their service transformation strategy.

Bill Pollock with Strategies for Growth shared with attendees recent data from a 2014 Warranty Chain Management Benchmark Study that found that the top two drivers for improvements in warranty management was the desire to improve customer retention and improve post-sale customer satisfaction issues.

Warranty is no longer just about managing claims and transactions but the impact that  it has on understanding customer satisfaction and the value your customer is realizing from your products. Using warranty outcomes as a direct link to how products perform has become a key customer performance indicator. Not to mention the additional benefits of cost and risk reduction you achieve from making sure your products perform as expected.

The industry further validates this shift in focus and investment to the customer with Warranty Week magazine reporting, “In 2013, it seems, manufacturers spent a little more on warranty, not by letting inefficiencies creep back into their processes, but by letting the quality of the customer experience rise a little. And that takes money, which hopefully pays for itself down the road in terms of rising levels of satisfaction, customer loyalty, repeat purchases, and ultimately higher revenue.”

At WCM service leaders from various industries shared insight on their warranty transformation journey and how the customer experience is the driving force for change. Here are a few highlights:

• Phil Arrata, Vice President, Services, Best Buy Canada, shared his insight on the evolution of their extended service contracts and emphasized how it was “less about product breaking and fulfillment and more about the value {Best Buy} provides to the customer.” Arrata explained that it was no longer just about the product but how and how long the customer is using the product. He shared how the voice of the customer should not only be used in designing products but also in how you design new service models that keep you connected to the customer and enable them to get more and more value out of your products. He also emphasized the importance of collaboration both internally and externally with all areas of the business involved in the customer experience. For Best Buy Canada, it is about evolving service to make sure you are creating a compelling customer value proposition which is good advice for any service organization no matter the industry.

• Sheila Cardines, Global Warranty Process Owner, Caterpillar presented a great overview of the journey that Caterpillar had gone through to transform warranty administration. According to Cardines, one of the major motivators of Caterpillar’s warranty transformation was the customer and improving the customer experience. At Caterpillar, warranty touches every part of their business which elevated the importance of improving the warranty process. She shared that finding the right executive sponsorship was critical to their successful transformation as well as being able to demonstrate how warranty applied to customer experience and value and the bottom line.

Based on the dialogue of attendees throughout the conference, warranty transformation is not an easy venture and will continue to be a challenge, but the impact on overall customer value and service performance cannot be denied.

The Service Council’s 2014 Service Outlook says “The relationship between happy customers and financial growth is no longer adversarial, but is in fact complementary. Happier customers are more loyal and more likely to be candidates to renew or increase their spend with an organization.”

In this “Age of the Customer” it’s important to always keep the customer at the heart of your service transformation.

How are you incorporating the voice of the customer in your service transformation?



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One thought on “Transforming Service in the Age of the Customer”

  1. Great perspectives, Michelle! In our fast-paced, data-driven world, it’s hard to measure the “heart” of our service delivery teams and the compassion shown in a 1:1 interaction at a service desk or in a service call. Your blog post reminds us that all of the rules and metrics don’t matter if we undermine trust. Figuring out a way to train our teams and our people on the softer (heart) side of business can go a long way in fostering life-long relationships and collaborative results (such as the product development ideas alluded to above). I’m guessing the service industry has software or monitoring tools to train and reinforce the softer side of service (in addition to the # of transactions); I’d love to hear about these if they do exist. Thanks!

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